COVID-19 JOB RETENTION SCHEME
How to protect your workforce in turbulent times
The government have created the Coronavirus Job Retention Scheme to allow employers who might otherwise have no choice but to lay staff off, to retain their workforce on an 80% wage. Staff are effectively held on a retainer, safe in their homes away from the virus. The employer runs payroll as normal – at 80% average wage and pays staff. The grant which includes tax, employers pension and employers NI is paid by the government to the employer. The employer pays PAYE, NIC and pension obligations as normal.
If you are in financial distress due to COVID-19 you can call the new HMRC COVID-19 helpline – Tel: 0800 024 1222
Bookmark this page and check back regularly.
Coronavirus Job Retention Scheme
The Coronavirus Job Retention Scheme is a temporary scheme open to all UK employers for at least three months starting from 1 March 2020. It is designed to support employers whose operations have been severely affected by Coronavirus (COVID-19).
- Grants of up to £2,500 per employee where those employees are unable to work (are ‘furloughed’) because of coronavirus, covering 80% of gross salary costs PLUS Employers National Insurance and Pension contributions.
- Employers can top up wages to 100% but do not have to
- Intended to run for three months in the first instance with the first payments expected in early April and the scheme fully up and running by the end of that month
- The grants will be paid via HMRC
- All UK employers will be eligible
- What next? The claim portal is expected to be available on Monday 20th April.
What staff can and cannot do on furlough
- When on furlough, an employee cannot undertake work for, or on behalf, of the organisation or any linked or associated organisation. This includes providing services or generating revenue.
- Furloughed staff can work for other companies while they are furloughed so long as their employment contract allows it. So if staff want to top up their 80% salary with a part-time job at their local supermarket, they could do that without compromising their agreement with you.
- Furloughed staff can do volunteer work or training so long as it does not provide services to or generate revenue for, or on behalf of your organisation or a linked or associated organisation.
Updates from 27 March 2020
Full guidance has now been published setting out how businesses can claim through the coronavirus job retention scheme. Some key details are as follows:
- Only employers that created and started a PAYE payroll scheme on or before 28 February 2020 are eligible.
- The scheme covers full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
- Employees made redundant after 28 February 2020 but rehired by their employer can be furloughed.
- Employees hired after 28 February cannot be furloughed.
Furloughing Q&A 02 April 2020
Harry and Lisa discuss the top questions asked by our clients relating to furloughing staff.
- Can staff work when furloughed?
- Can Zero hours staff or variable hours staff be furloughed?
- Can staff on SMP be furloughed?
- Who has to fund furloughed wages?
- How long can staff be furloughed for?
- What happens to staff on minimum wage?
Making a claim will be via portal (open 20 Apr20)
To make a claim, employers will need to provide:
- ePAYE reference number
- number of employees being furloughed
- the claim period
- amount claimed
- bank account number and sort code
- contact name and number.
Updates from 04 April 2020
- The grant will be calculated based on regular, contractual pay, such as wages, compulsory commission and past overtime.
- The calculation will not include discretionary commission (including tips) payments or bonuses, non-cash payments or benefits in kind.
Updates from 15 April 2020
Scheme updated to include PAYE payroll schemes that were started on or before 19 March 2020
Updates from 16 April 2020
Scheme extended to 30th June 2020 so claim period now covers 4 months from 1st March 2020 to 30th June 2020.